House Appropriations Committee Seeks $6 Billion for Broadband, Would Impose Speed Requirements Upon Most Grant Recipients

Broadband Stimulus January 16th, 2009

, Publisher, BroadbandBreakfast.com

Editor’s Note: Visit BroadbandCensus.com’s Broadband Wiki for a catalogue of the various broadband-related stimulus proposals, at http://development.broadbandcensus.com/zipcodes/states.

WASHINGTON, January 16, 2009 – The House Appropriations Committee on Thursday released draft legislation (PDF) that would provide $6 billion to expand broadband access, both in rural areas and in areas that are generally “underserved” by broadband providers.

The draft legislation would split the $6 billion into two pools of $2.85 billion, with one administered by the Rural Utility Service of the Agriculture Department, and the other by the National Telecommunications and Information Agency of the Commerce Department.

An additional $350 million would be allocated to NTIA’s budget to fund the administration of broadband-related activities, according to the draft.

Several non-profit advocacy organizations expressed satisfaction that the broadband stimulus measures do not appear designed to primarily provide financial benefits for incumbent telecommunications providers.

“We urge that these dollars be tied to clear public service principles and concrete administrative accountability,” said Ben Scott, policy director of Free Press, in a Thursday letter to David Obey, D-Wis., Chairman of the House Appropriations Committee. “Broadband as economic recovery should be ‘build-out,’ not ‘bail-out.’”

In the debate over broadband stimulus, one emerging dividing line separating industry-focused groups from other broadband advocates is the former’s emphasis on tax credits as a means to immediately effectuate broadband-related investments.

The Information Technology and Innovation Foundation, for example, had urged that a proposed $10 billion investment in broadband-related activities be split evenly between tax credits and broadband grants.

Other industry-focused groups have also urged the tax credit approach.

Free Press, by contrast, proposed that $30 billion of its $38 billion in stimulating broadband supply be channeled through grants. EDUCAUSE and other groups have also focused on grant programs so that municipalities and non-profit entities can take advantage of such investments.

Additionally, the draft legislation appears to favor high-speed variants of broadband. The Federal Communications Commission currently defines “broadband” as communications at speeds of 768 kilobits per second (Kbps) or greater. In June, the FCC raised that threshold from 200 Kbps.

As a practical matter, most of the major wire-based broadband-related services offer actual download speeds in the 2 Mpbs to 6 Mpbs range.

For example, tests conducted by users of BroadbandCensus.com show that home users of fiber-optic services enjoyed an average download speed of 6.48 Mbps, that cable modem users experienced an average download speed of 4.44 Mbps, and that digital subscriber line (DSL) service averaged 1.7 Mbps.

Among all takers of the Broadband Census and speed test, the average download speed for home internet users was 3.58 Mbps (average upload speed was 1.0 Mbps). The median download speed among home internet users was 2.19 Mbps (median upload speed was 643 Kbps).

But the draft stimulus bill of the House Appropriations Committee seeks to spur investment in broadband of a far higher caliber.

Of the $2.85 billion portion to be administered by NTIA, for example, $1.85 billion would go to wireline-based broadband, and $1 billion would to wireless services.

For the $1.85 billion in wireline-based broadband, the NTIA would award grants “to the extent possible” such that 75 percent of funds would go to eligible entities providing broadband of at least 45 Mpbs for downloads and 15 Mbps for uploads, to areas that are “underserved.”

The remaining 25 percent of that pool would go to providers offering “basic broadband service” – which the legislation defines as 5 Mpbs for downloads and 1 Mpbs for uploads – to areas currently “unserved” by existing broadband providers.

Both terms – “underserved” and “unserved” –  are left to be defined by the FCC, within 45 days of the act’s passage.

However, the draft bill does require that NTIA’s stimulus-related funds go to either “unserved” or “underserved” areas, and that no more than 20 percent of a state’s population or geography may fall into such areas.

The $1 billion pool for wireless broadband would be similarly bisected: 75 percent going to providers of “advanced wireless broadband service” – defined as 3 Mbps for downloads and 1 Mbps for uploads – in underserved areas.

The remaining 25 percent would go to entities providing wireless voice services in unserved areas.

About BroadbandCensus.com

BroadbandCensus.com is a free information and news service providing information about local broadband speeds, prices, availability, reliability and competition. Take the Broadband Census at http://broadbandcensus.com/census/form

BroadbandCensus.com is a participant in the National Broadband Strategy ‘Call to Action’ being shepherded by James Baller, of Baller Herbst Law Group. Drew Clark, Editor and Executive Director of BroadbandCensus.com, is co-chair of the “Metrics Working Group,” together with ITIF President Robert Atkinson.

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One Response to “House Appropriations Committee Seeks $6 Billion for Broadband, Would Impose Speed Requirements Upon Most Grant Recipients”

  1. BroadbandCensus.com Says:

    [...] January 16, 2009 – House Appropriations Committee Seeks $6 Billion for Broadband, Would Impose Speed Requirements Upon Most Grant Recipients. [...]

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